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The Central Bank of the Russian Federation (Bank of Russia)

Press Service

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Information Notice

On establishing fact of PJSC ETS stock market manipulation

The Bank of Russia established the fact of manipulation of Public Joint-stock Company Uniform Techno Systems ordinary shares (hereinafter, the Shares) during trading on PJSC Moscow Exchange (hereinafter, the Exchange) in 2015–2017.

The Bank of Russia’s investigation established that several persons related with each other and with PJSC ETS, i.e. Denis A. Litvinov, Aleksey S. Lashkov, Denis S. Zelenya, Andrey Yu. Yakovlev, LLC Omega-Trade, during trading on the Exchange, acting on the basis of a preliminary agreement, conducted trades in the Shares which did not have clear economic sense.

In course of simulation of trades the Bank of Russia established that the mentioned persons made a significant influence on the Shares price on the Exchange. This influence aimed at misleading other participants as to the market situation and the Shares price, and at creating misliding trading activity and increasing the demand among a wide range of investors.

According to the data provided by the Exchange, the trades conducted by D.A. Litvinov, A.S. Lashkov, D.S. Zelenya, A.Yu. Yakovlev and LLC Omega-Trade in the main trading mode on the Exchange resulted in a substantial deviation in the Shares trading parameters.

The actions taken by D.A. Litvinov, A.S. Lashkov, D.S. Zelenya, A.Yu. Yakovlev and LLC Omega-Trade are qualified as manipulation for the Share market according to Section 2 and 6 of Part 1 of Article 5 of Federal Law No. 224-FZ ‘On Countering the Misuse of Insider Information and Market Manipulation and Amending Certain Laws of the Russian Federation’ (hereinafter, the Federal Law). The above mentioned persons violated the ban imposed by Part 2, Article 6 of the Federal law.

Besides, in the course of a comprehensive examination of the activities of PJSC ETS, it was established that the Shares of the main issue were mainly paid by a 100% stake of LLC Amkodor-Optim Saint Petersburg (hereinafter, the Company). Upon considering the market value assessment report of the stake totalling 100% of the authorised capital of LLC Amkodor-Optim Saint Petersburg, the Bank of Russia identified signs of misuse committed during the reporting, which mislead as to the financial standing of the Company and the reliability of calculations. Therefore, the true financial standing of PJSC ETS and the actual value of the Shares were misrepresented.

Another objective of PJSC ETS was to place an additional issue of Shares, which were to be paid by the stakes of LLC Group of Companies Mir Privoda, LLC Sila Tekhniki and LLC Korporatsiya Aktiv (hereinafter, the Companies), which had not been properly evaluated.

The Bank of Russia requested the self-regulatory organisation of appraisers (hereinafter, the SROA) to examine the evaluation activities of the appraiser which had prepared reports on the evaluation of the market value of stakes in the share capitals of the Companies. Besides, the SROA was to provide its professional judgement about the quality of reports, their compliance with the requirements of Federal Law No. 135-FZ, dated 29.07.1998, ‘On Appraisal Activities in the Russian Federation’, federal appraisal standards, appraisal standards and rules of a self-regulatory organisation, and also compliance with the rules of business and professional ethics. Based on the unscheduled examination of the appraiser’s activities during the preparation of appraisal reports on the Companies, the SROA confirmed the existence of violations in these reports and their non-compliance with legislative requirements on appraisal activities.

As a result of measures taken, the shares of the additional issue of PJSC ETS were not placed and the securities issue was recognised void.

The Bank of Russia took appropriate measures regarding the persons engaged in market manipulation aimed at preventing similar violations in future, including the blocking of their trading accounts.

The SROA applied disciplinary sanctions against the appraiser which had committed material misstatement in the appraisal reports on assets value.

29 June 2018

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